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Paderborn University in February 2023 Show image information

Paderborn University in February 2023

Photo: Paderborn University, Hannah Brauckhoff

Prof. Dr. Claus-Jochen Haake

Prof. Dr. Claus-Jochen Haake

Economics, especially Microeconomics

Head - Professor

Sonderforschungsbereich 901

Deputy Speaker - Professor - Principal Investigator

Center of International Economics


+49 5251 60-3378
+49 5251 60-3365
Office hours:

by appointment

Warburger Str. 100
33098 Paderborn
Prof. Dr. Claus-Jochen Haake
06/2017 - today

Head of Doctorate Committeee

10/2015 - today

Board Member CRC 901 "On-The-Fly Computing"

04/2009 - today

Professor for Economics, esp. Microeconomics, Paderborn University

10/2011 - 10/2015

Vice Dean for Research

10/2008 - 03/2009

Substitute Professor for Economics, esp. Microeconomics, Paderborn University

06/2003 - 09/2008

Assistant Professor, Institute for Mathematical Economics, Bielefeld University

06/2004 - 08/2004

Visiting Scholar, University of Illinois at Urbana-Champaign, USA

02/2004 - 05/2004

Visiting Scholar, Harvey Mudd College, USA

04/1998 - 05/2003

Research Assistant, Institute for Mathematical Economics, Bielefeld University


Phd. (Dr. rer. pol.), Institute for Mathematical Economics, Bielefeld University


Diloma Mathematical Economics, Bielefeld University

Open list in Research Information System


Wage Bargaining and Employment Revisited: Separability and Efficiency in Collective Bargaining

C. Haake, T. Upmann, P. Duman, Scandinavian Journal of Economics (2022)

We analyse the two-dimensional Nash bargaining solution (NBS) by deploying the standard labour market negotiations model of McDonald and Solow (1981). We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems, such that the two solutions together replicate the solution of the two-dimensional problem if the NBS is applied. The axiom of Independence of Irrelevant Alternatives is shown to be crucial for this type of decomposability. This result has significant implications for actual negotiations because it allows for the decomposition of a multi-dimensional bargaining problem into one-dimensional problems---and thus helps to facilitate real-world negotiations.

Distortion through modeling asymmetric bargaining power

C. Haake, T. Streck, 2022, pp. 17

We study the consequences of modeling asymmetric bargaining power in two-person bargaining problems. Comparing application of an asymmetric version of a bargaining solution to an upfront modification of the disagreement point, the resulting distortion crucially depends on the bargaining solution concept. While for the Kalai-Smorodinsky solution weaker players benefit from modifying the disagreement point, the situation is reversed for the Nash bargaining solution. There, weaker players are better off in the asymmetric bargaining solution. When comparing application of the asymmetric versions of the Nash and the Kalai-Smorodinsky solutions, we demonstrate that there is an upper bound for the weight of a player, so that she is better off with the Nash bargaining solution. This threshold is ultimately determined by the relative utilitarian bargaining solution. From a mechanism design perspective, our results provide valuable information for a social planner, when implementing a bargaining solution for unequally powerful players.

Playing games with QCA: Measuring the explanatory power of single conditions with the Banzhaf index

C. Haake, M. Schneider, 2022

Qualitative comparative analysis (QCA) enables researchers in international management to better understand how the impact of a single explanatory factor depends on the context of other factors. But the analytical tool box of QCA does not include a parameter for the explanatory power of a single explanatory factor or condition . In this paper, we therefore reinterpret the Banzhaf power index, originally developed in cooperative game theory, to establish as a goodness-of-fit parameter in QCA. The relative Banzhaf index we suggest measures the explanatory power of one condition averaged across all sufficient combinations of conditions. The paper argues that the index is especially informative in three situations that are all salient in international management, namely substantial limited diversity in the data, the emergence of strong INUS conditions in the analysis, and theorizing with contingency factors. The paper derives the properties of the relative Banzhaf index in the QCA context, demonstrates how the index can be computed easily from a rudimentary truth table, and explores its insights by revisiting selected papers in international management that apply fuzzy-set QCA. The discussion section offers routes for exploring further how the relative Banzhaf and other power indexes can be applied in QCA.


Socio-legal systems and implementation of the Nash solution in Debreu–Hurwicz equilibrium

C. Haake, W. Trockel, Review of Economic Design (2021)

<jats:title>Abstract</jats:title><jats:p>In this article we combine Debreu’s (Proc Natl Acad Sci 38(10):886–893, 1952) social system with Hurwicz’s (Econ Design 1(1):1–14, 1994; Am Econ Rev 98(3):577–585, 2008) ideas of embedding a “desired” game form into a “natural” game form that includes all feasible behavior, even if it is “illegal” according to the desired form. For the resulting socio-legal system we extend Debreu’s concepts of a social system and its social equilibria to a socio-legal system with its Debreu–Hurwicz equilibria. We build on a more general version of social equilibrium due to Shafer and Sonnenschein (J Math Econ 2(3):345–348, 1975) that also generalizes the dc-mechanism of Koray and Yildiz (J Econ Theory 176:479–502, 2018) which relates implementation via mechanisms with implementation via rights structures as introduced by Sertel (Designing rights: invisible hand theorems, covering and membership. Tech. rep. Mimeo, Bogazici University, 2001). In the second part we apply and illustrate these new concepts via an application in the narrow welfarist framework of two person cooperative bargaining. There we provide in a socio-legal system based on Nash’s demand game an implementation of the Nash bargaining solution in Debreu–Hurwicz equilibrium.</jats:p>


Introduction to the Special Issue “Bargaining”

C. Haake, W. Trockel, Homo Oeconomicus (2020), 37(1-2), pp. 1-6



The Decomposability of the Nash Bargaining Solution in Labor Markets

C. Haake, T. Upmann, P. Duman, CIE Working Paper Series, Paderborn University, 2019

In this paper, we analyze the two-dimensional Nash bargaining solution (NBS) deploying a standard labor market negotiations model (see McDonald and Solow, 1981; Creedy and McDonald, 1991). We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems such that the (Cartesian) product of the solutions of these problems replicates the solution of the two-dimensional problem, if the NBS is applied. However, this decomposition fails for any solution concept that does not satisfy the axiom of Independence of Irrelevant Alternatives (IIA axiom). Our decomposition result has significant implications for actual negotiations, as it allows for the decomposition of a multi-issue bargaining problem into a set of simpler problems, in particular a set of single-issue bargaining problems. In this way, the decomposition may help facilitate negotiations in labor markets and also in other environments.


Disaggregating User Evaluations Using the Shapley Value

M. Feldotto, C. Haake, A. Skopalik, N. Stroh-Maraun, in: Proceedings of the 13th Workshop on Economics of Networks, Systems and Computation (NetEcon 2018), 2018, pp. 5:1-5:6

We consider a market where final products or services are compositions of a number of basic services. Users are asked to evaluate the quality of the composed product after purchase. The quality of the basic service influences the performance of the composed services but cannot be observed directly. The question we pose is whether it is possible to use user evaluations on composed services to assess the quality of basic services. We discuss how to combine aggregation of evaluations across users and disaggregation of information on composed services to derive valuations for the single components. As a solution we propose to use the (weighted) average as aggregation device in connection with the Shapley value as disaggregation method, since this combination fulfills natural requirements in our context. In addition, we address some occurring computational issues: We give an approximate solution concept using only a limited number of evaluations which guarantees nearly optimal results with reduced running time. Lastly, we show that a slightly modified Shapley value and the weighted average are still applicable if the evaluation profiles are incomplete.

Outcome Equivalence in School Choice with Reciprocal Preferences

C. Haake, N. Stroh-Maraun, Economics Letters (2018), 170, pp. 39 - 41

We show that the Boston school choice mechanism (BM), the student proposing deferred acceptance algorithm (DA) and the top trading cycles algorithm (TTC) generate the same outcome when the colleges’ priorities are modified according to students’ preferences in a “first preferences first” manner. This outcome coincides with the BM outcome under original priorities. As a result, the DA and TTC mechanism that are non-manipulable under original priorities become vulnerable to strategic behavior.

On unification of solutions to the bargaining problem

C. Haake, C. Qin, CIE Working Paper Series, Paderborn University, 2018

We establish axioms under which a bargaining solution can be found by the maximization of the CES function and is unique up to specification of the distribution and elasticity parameters. This solution is referred to as the CES solution which includes the NASH and egalitarian solutions as special cases. Next, we consider a normalization of the CES function and establish axioms, under which a bargaining solution can be found by the maximization of the normalized CES and is unique up to the specifications of the distribution and its substitution parameters. We refer to this solution as the normalized CES solution, which includes the Nash and Kalai-Smorodinsky solutions as special cases. Our paper contributes to bargaining theory by establishing unified characterizations of existing as well as a great variety of new bargaining solutions.

Thoughts on Social Design

W. Trockel, C. Haake, in: Studies in Economic Design, Springer, 2018

One of the fundamental problems in applications of methods and results from mechanism design and implementation theory is the effective enforcement of theoretically established equilibria by which social choice rules are implemented. Hurwicz (2008) and Myerson (2009) introduce different concepts of formalizing enforcement of institutional rules via the introduction of legal and illegal games. In this note the relation of their concepts with that of a social system defined inDebreu (1952) is analyzed and its potential of being instrumental for modelling institution design is discussed. The existence proof for such a system, also known as generalized game or abstract economy had been the basis for the existence proof of a competitive equilibrium of an economy.

The Generalized Nash Bargaining Solution for Transfer Price Negotiations under Incomplete Information

C. Haake, S. Recker, Group Decision and Negotiation (2018), 27(6), pp. 905-932

In our model two divisions negotiate over type-dependent contracts to determine an intrafirm transfer price for an intermediate product. Since the upstream division's (seller's) costs and downstream division's (buyer's) revenues are supposed to be private information, we formally consider cooperative bargaining problems under incomplete information. This means that the two divisions consider allocations of expected utility generated by mechanisms that satisfy (interim) individual rationality, incentive compatibility and/or ex post efficiency. Assuming two possible types for buyer and seller each, we first establish that the bargaining problem is regular, regardless whether or not incentive and/or efficiency constraints are imposed. This allows us to apply the generalized Nash bargaining solution to determine fair transfer payments and transfer quantities. In particular, the generalized Nash bargaining solution tries to balance divisional profits, while incentive constraints are still in place. In that sense a fair profit division is generated. Furthermore, by means of illustrative examples we derive general properties of this solution for the transfer pricing problem and compare the model developed here with the models existing in the literature. We demonstrate that there is a tradeoff between ex post efficiency and fairness.

Maintaining vs. Milking Good Reputation when Customer Feedback is Inaccurate

B. Mir Djawadi, R. Fahr, C. Haake, S. Recker, PLoS ONE (2018), 13(11), e0207172

In Internet transactions, customers and service providers often interact once and anonymously. To prevent deceptive behavior a reputation system is particularly important to reduce information asymmetries about the quality of the offered product or service. In this study we examine the effectiveness of a reputation system to reduce information asymmetries when customers may make mistakes in judging the provided service quality. In our model, a service provider makes strategic quality choices and short-lived customers are asked to evaluate the observed quality by providing ratings to a reputation system. The customer is not able to always evaluate the service quality correctly and possibly submits an erroneous rating according to a predefined probability. Considering reputation profiles of the last three sales, within the theoretical model we derive that the service provider’s dichotomous quality decisions are independent of the reputation profile and depend only on the probabilities of receiving positive and negative ratings when providing low or high quality. Thus, a service provider optimally either maintains a good reputation or completely refrains from any reputation building process. However, when mapping our theoretical model to an experimental design we find that a significant share of subjects in the role of the service provider deviates from optimal behavior and chooses actions which are conditional on the current reputation profile. With respect to these individual quality choices we see that subjects use milking strategies which means that they exploit a good reputation. In particular, if the sales price is high, low quality is delivered until the price drops below a certain threshold, and then high quality is chosen until the price increases again.


Towards an Economic Theory of Destabilization War

T. Gries, C. Haake, Peace Economics, Peace Science and Public Policy (2016), 22(4), pp. 377 - 384


An Economic Theory of 'Destabilization War'

T. Gries, C. Haake, 2016

While Islamic State is the most present example, it is a fact that in many places around the globe, throughout history initially small groups have tried to challenge and destabilize or even overthrow governments by means of terrorist and guerrilla strategies. Therefore, we answer two questions. Why does a small group of insurgents believe it can overthrow the government by turning violent, even if the government is clearly superior? And how does a conflict develop into terrorism, a guerilla war, or a major conventional civil war, or is resolved peacefully? We develop a formal model for rebels and government and derive optimal choices. Further, we focus on three elements as important ingredients of a "destabilization war". All three of these - large random events, time preference (which we relate to ideology), and choice of duration of fight - are rarely considered in formal conflict theory. We can answer the above two questions using game theory analysis. First, insurgents rise up because they hope to destabilize through permanent challenging attacks. In this context, large randomness is an important ally of rebels. While each individual attack may have a low impact, at some point a large random event could lead to success. Hence, the duration of activities is a constitutive element of this kind of armed conflict. Patience (low time preference), which may reflect rebels' degree of ideological motivation, is crucial. Second, the mode of warfare or the conflict resolutions that develop are generally path-dependent and conditioned on the full set of options (including compromise). Various conditions (level of funding, ease of recruitment, access to weapons) influence different modes of warfare or a peaceful compromise in a complex way.


Strategic Formation of Customer Relationship Networks

S. Brangewitz, C. Haake, P. Möhlmeier, Universität Paderborn, 2015

We analyze the stability of networks when two intermediaries strategically form costly links to customers. We interpret these links as customer relationships that enable trade to sell a product. Equilibrium prices and equilibrium quantities on the output as well as on the input market are determined endogenously for a given network of customer relationships. We investigate in how far the substitutability of the intermediaries' products and the costs of link formation influence the intermediaries' equilibrium profits and thus have an impact on the incentives to strategically form relationships to customers. For networks with three customers we characterize locally stable networks, in particular existence is guaranteed for any degree of substitutability. Moreover for the special cases of perfect complements, independent products and perfect substitutes, local stability coincides with the stronger concept of Nash stability. Additionally, for networks with n customers we analyze stability regions for selected networks and determine their limits when n goes to infinity. It turns out that the shape of the stability regions for those networks does not significantly change compared to a setting with a small number of customers.


Provider Competition in Infrastructure-as-a-Service

J. Künsemöller, S. Brangewitz, H. Karl, C. Haake, in: Proceedings of the 2014 IEEE International Conference on Services Computing (SCC), 2014, pp. 203-210

This paper explores how cloud provider competition influences instance pricing in an IaaS (Infrastructure-as-a-Service) market. When reserved instance pricing includes an on-demand price component in addition to a reservation fee (two-part tariffs), different providers might offer different price combinations, where the client’s choice depends on its load profile. We investigate a duopoly of providers and analyze stable market prices in two-part tariffs. Further, we study offers that allow a specified amount of included usage (three-part tariffs). Neither two-part nor three-part tariffs produce an equilibrium market outcome other than a service pricing that equals production cost, i.e., complex price structures do not significantly affect the results from ordinary Bertrand competition.


Cooperative Transfer Price Negotiations under Incomplete Information

S. Brangewitz, C. Haake, CIE Working Paper Series, Paderborn University, 2013

In this paper, we analyze a model in which two divisions negotiate over an intrafirm transfer price for an intermediate product. Formally, we consider bargaining problems under incomplete information, since the upstream division’s (seller's) costs and downstream division's (buyer's) revenues are supposed to be private information. Assuming two possible types for buyer and seller each, we first establish that the bargaining problem is regular, regardless whether incentive and/or efficiency constraints are imposed. This allows us to apply the generalized Nash bargaining solution to determine transfer payments and transfer probabilities. Furthermore, we derive general properties of this solution for the transfer pricing problem and compare the model developed here with the existing literature for negotiated transfer pricing under incomplete information. In particular, we focus on the models presented in Wagenhofer (1994).


Negotiating Transfer Prices

C. Haake, J.T. Martini, Group Decision and Negotiation (2012), 22(4), pp. 657-680


On the institutional design of burden sharing when financing external border enforcement in the EU

C. Haake, T. Krieger, S. Minter, International Economics and Economic Policy (2012), 10(4), pp. 583-612



Proportionality and the power of unequal parties

D. Dimitrov, C. Haake, International Journal of Economic Theory (2011), 7(2), pp. 189-200

In this paper we introduce the concept of an overall power function that is meant to combine two sources of a party’s power in a parliament. The first source is based on the possibilities for the party to be part of a majority coalition and it is typically modeled using a cooperative simple game. The second source takes into account parties’ asymmetries outside the cooperative game and it is displayed by a vector of exogenously given weights. We adopt a normative point of view and provide an axiomatic characterization of a specific overall power function, in which the weights enter in a proportional fashion.


Stability and Nash implementation in matching markets with couples

C. Haake, B. Klaus, Theory and Decision (2010), 69(4), pp. 537-554



Monotonicity and Nash implementation in matching markets with contracts

C. Haake, B. Klaus, Economic Theory (2009), 41(3), pp. 393-410



C. Haake, International Game Theory Review (2009), 11(01), pp. 15-32

We discuss a model, in which two agents may distribute finitely many objects among themselves. The conflict is resolved by means of a market procedure. Depending on the specifications, this procedure serves to achieve bargaining solutions such as the discrete Raiffa solution, the Kalai-Smorodinsky solution and the Perles-Maschler solution. The latter is axiomatized using the superadditivity axiom, which in the present context is readily interpreted as resolving a specific source of conflict potential.


Stable governments and the semistrict core

D. Dimitrov, C. Haake, Games and Economic Behavior (2008), 62(2), pp. 460-475


The Shapley value of phylogenetic trees

C. Haake, A. Kashiwada, F.E. Su, Journal of Mathematical Biology (2008), 56(4), pp. 479-497


Two support results for the Kalai–Smorodinsky solution in small object division markets

C. Haake, Mathematical Social Sciences (2008), 57(2), pp. 177-187


On Maskin monotonicity of solution based social choice rules

C. Haake, W. Trockel, Review of Economic Design (2008), 14(1-2), pp. 17-25


Comments on: Transversality of the Shapley value

C. Haake, TOP (2008), 16(1), pp. 48-50



A note on the paradox of smaller coalitions

D. Dimitrov, C. Haake, Social Choice and Welfare (2007), 30(4), pp. 571-579



Bundling in exchange markets with indivisible goods

C. Haake, B. Klaus, D. Dimitrov, Economics Letters (2006), 93(1), pp. 106-110

Government versus Opposition: Who Should be Who in the 16th German Bundestag?

D. Dimitrov, C. Haake, Journal of Economics (2006), 89(2), pp. 115-128



Trading bargaining weights

C. Haake, U. Ervig, Journal of Mathematical Economics (2005), 41(8), pp. 983-993

We consider a model, in which two agents are engaged in two separate bargaining problems. We introduce a notion of bargaining weights (bargaining power), which is basically given by asymmetric versions of the Perles–Maschler bargaining solution. Thereby, we view bargaining power as ordinary goods that can be traded in an exchange economy.With equal initial endowment of bargaining power there exists aWalrasian equilibrium in this exchange economy such that the utility allocation in equilibrium coincides with the Perles–Maschler bargaining solution of the aggregate bargaining problem. Equilibrium prices are given by the primitives of the two bargaining problems.


Bidding for envy-freeness: A procedural approach to n-player fair-division problems

C. Haake, M. Raith, F.E. Su, Social Choice and Welfare (2002), 19(4), pp. 723-749

We develop a procedure for implementing an efficient and envy-free allocation of m objects among n individuals with the possibility of monetary side-payments,assuming that players have quasi–linear utility functions. The procedure eliminates envy by compensating envious players. It is fully descriptive and says explicitly which compensations should be made,and in what order. Moreover,it is simple enough to be carried out without computer support. We formally characterize the properties of the procedure,show how it establishes envy-freeness with minimal resources,and demonstrate its application to a wide class of fair-division problems.

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